Kenya Power and Lighting Company (KPLC) management appeared before Parliament this week to address historical audit queries, even as the utility shows signs of financial improvement in recent periods.
- •The session focused on loss making years that ate into working capital reserves, pending dues from government agencies, procurement gaps, foreign exchange losses among other key issues at the utility company.
- •Operational challenges remain significant, with Kenya Power losing 23% of distributed electricity, above EPRA's 19.5% threshold.
- •Additionally, over 21,000 customer connection projects worth KSh 12 billion remain incomplete, some dating back 11 years.
"We have made progress in reducing technical losses, improving billing accuracy, and engaging the government on debt settlements. The goal is to make Kenya Power self-sustaining once again," KPLC Managing Director Dr. Joseph Siror told members of the National Assembly's Public Investments Committee on Commercial Affairs and Energy (PICCAE).
Committee Chairperson David Pkosing, the Pokot South MP, led the review of Auditor-General's reports for the 2020/21 to 2022/23 financial years that showed Kenya Power recorded a KSh 4.4 billion net loss and negative working capital of KSh 51 billion in periods under review. The audit report stated: "There exists a material uncertainty on the company's ability to meet its obligations as they fall due."
Dr. Siror presented a more optimistic outlook, telling MPs: "Our working capital deficit has reduced from KSh 75 billion in 2020 to KSh 51 billion in 2023. With the ongoing reforms and revenue growth, we expect to turn a corner soon."
While the hearing focused on historical audits, the company's most recent financial statements show significant improvement.
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- •Kenya Power reported a profit before tax of KSh 43 billion in FY2023/24 and KSh 35.38 billion in FY2024/25.
- •Working capital has also strengthened, standing at negative KSh 27.4 billion in FY2023/24 and negative KSh 19.2 billion in the most recent financial year, showing steady progress from the KSh 51 billion deficit recorded in FY2022/23.
Lawmakers identified several ongoing concerns during the session. Government institutions owe Kenya Power over KSh 26 billion in unpaid bills, with the Rural Electrification Scheme and county governments among the main debtors. The committee heard that a 2019 Cabinet directive to refund KSh 19.4 billion remains unimplemented.
"How can the government expect efficiency from Kenya Power when it's one of the biggest defaulters. We must walk the talk when it comes to paying our debts," Hon. Pkosing told the committee.
The session also revealed KSh 23 billion in foreign exchange losses from dollar-denominated loans and power purchase agreements. Dr. Siror said the company had petitioned the Energy and Petroleum Regulatory Authority (EPRA) to review the forex adjustment mechanism by 2026.
Auditors flagged several procurement issues, including a KSh 75 million land purchase in Machakos and direct purchases of spare parts without competitive tendering. The committee also questioned KSh 488 million in old supplier invoices and a KSh 26.8 million exit package paid without proper approvals.
The session concluded with Parliament maintaining oversight as Kenya Power balances historical accountability against its ongoing recovery efforts, with recent financial results suggesting the company is making progress toward stability.
